News January 2016

EDF

Electricite de France SA, the operator of 58 atomic reactors in France, dropped to a record in Paris trading after newspaper Les Echos said the utility may have underestimated the cost of storing its most radioactive waste. EDF fell as much as 7.3 percent to 11.59 euros on Tuesday, the lowest since the stock began trading in the French capital in 2005. The shares were down 3.5 percent at 1:15 p.m. local time. France is seeking to store long-life radioactive waste from EDF’s reactors, as well as from Areva SA and atomic-research organization CEA, at a site near Bure, which straddles the Meuse and Haute-Marne regions. Andra, the agency that manages nuclear waste, has put the cost of building and operating a deep storage facility at about 30 billion euros ($32.6 billion), Les Echos reported, citing people it didn’t identify. EDF, Areva and the CEA last year estimated the bill at about 20 billion euros. “This report is clearly negative for all nuclear operators, and most specifically for EDF and Areva, but the risks of project-cost revaluation is not new,” Xavier Caroen, an analyst at Bryan Garnier & Co., said in a research note.

Nuclear Regulation

The nuclear safety regulator is facing a leadership crisis and is ill-equipped to deal with a mounting workload linked to China’s plans to invest £8 billion in the British industry, experts have warned. The Office for Nuclear Regulation is responsible for ensuring the safety and security of 15 nuclear reactors, hazardous sites such as Sellafield and the transport and disposal of high-level nuclear waste. It also oversees the safety case for new reactors. In recent months, it has been plagued by desertions, including the departure of Andy Hall, the chief inspector, and Alasdair Corfield, the finance director. Neither has been replaced. The ONR has been struggling to recruit experienced staff and is advertising more than 20 vacant positions, including experts in the transportation of radioactive materials, cybersecurity, radiation protection and nuclear fuel safety. David Lowry, a nuclear industry consultant, said that he was “very concerned that the ONR doesn’t have the staff and expertise it needs” at a time when Chinese, French and Japanese companies are planning a huge expansion and existing UK reactors are approaching the end of their lives. Andy Blowers, who has served on a government committee dealing with the handling of nuclear waste, said that the ONR was thinly stretched, adding: “There are staffing pressures which mean they cannot cope.”

Nuclear Security

Commercially available drones have the potential to be converted into flying bombs capable of hitting targets such as nuclear power stations or the prime minister’s car, a report by a security thinktank has warned. “Drones are a game changer in the wrong hands,” warns the lead author of the report by the Oxford Research Group’s Remote Control Project. The report, The Hostile Use of Drones by Non-State Actors Against British Targets, highlights concerns that “drones will be used as simple, affordable and effective airborne improvised explosive devices”.

Rosyth Dockyard

The safety regime at the Rosyth naval dockyard, home to seven defunct nuclear submarines, has been called into question after an emergency exercise failed to demonstrate adequate arrangements for rescuing casualties from an accident. The UK government’s nuclear safety watchdog has ordered Babcock, the multinational company that runs the Fife dockyard for the Royal Navy, to rerun the exercise, codenamed Nightstar, in March because of mistakes made last September. An inspection by the Office for Nuclear Regulation (ONR) concluded that there were flaws in the way that staff looked after injured people during the exercise at the base known as ‘Scotland’s nuclear graveyard’. There were also communication and command problems in dealing with the imagined accident. The revelation has prompted “unease” about safety at the naval base, according to the local MP. Anti-nuclear campaigners have highlighted the serious risks of accidents, and demanded higher standards. The problems with the Nightstar exercise on September 30 2015 were disclosed in the ONR’s latest three-monthly report on Rosyth. Though inspectors thought that some of the exercise procedures were adequate, others were not. The MoD plans to dismantle the defunct nuclear subs at Rosyth, and then to transport the resulting 3,600 tonnes of radioactive waste to a disposal site yet to chosen. One option was an old nuclear site Chapelcross near Annan in Dumfries and Galloway. But this is opposed by the Scottish Government. A dock is being equipped to remove radioactive waste from the first “demonstrator” submarine, HMS Swiftsure. The aim is to start dismantling the boat in May.

EDF/Hinkley

The cash-strapped French energy giant EDF may sell off profitable stakes in its in its eight existing UK nuclear reactors to raise money for the Hinkley Point C project. But with no example of the EPR design planned for Hinkley even near completion, it may all prove a risk too far. EDF could unveil details of a sell-off plan on 16th February, when it is scheduled to release annual financial figures and is expected to give a final investment decision on building Britain’s first new reactors for 20 years. It has meanwhile emerged that another EDF project is running late at Taishan in China, where the company is building two 1.75GW reactors to the European Pressurised Reactor (EPR) design, the same as is planned for Hinkley C. The Taishan project is seen as the pilot for Hinkley C, which would also use twin EPR reactors. A further two EPRs are planned for the site. This precarious situation raises a deep and serious question for EDF and CGN to consider? Is it wise to commit to the EPRs at Hinkley C until at least one other EPR is working somewhere in the world? This applies especially to cash-tight EDF. CGN is understandably risk-averse over EPRs and is reportedly demanding an indemnity from EDF against losses at Hinkley C – so that while EDF would only own 66.5% of the project, it would be liable for 100% of any cost overruns. Meanwhile two legal challenges against the UK government’s enormous state aid package for Hinkley C are looming at the European Court: one brought by Austria, now joined by Luxembourg; and one by Germany’s Greenpeace Energy cooperative together with other green energy suppliers in Germany and Austria. There is also considerable unease in EDF about Hinkley C, which some fear could, in a worst-case scenario, sink the company altogether. The leak to Les Echos is widely supposed to have come from company insiders determined to scupper the project.

Hinkley/EDF

EDF is considering the sale of a €3bn (£2.2bn) stake in its British nuclear business in a bid to raise cash for new Hinkley Point reactors. Possible buyers would be state-owned Chinese companies, who are already committed partners on the £18bn Somerset project. EDF could unveil details of a sell-off plan on 16 February, when it is scheduled to release annual financial figures and is expected to give a final investment decision on building Britain’s first new reactors for 20 years. The French daily, Les Echos, reported on Thursday that EDF may reduce its stake in the eight existing nuclear reactors it owns from 80% to (sic) 29% (Should say by 29% to 51%) by bringing in a new investor as part of a wider €6bn disposal programme. Industry sources told the Guardian that the possible sell off was only one of a number of different options that were under consideration as the group looked at financing Hinkley Point C and other projects. They said it was still likely EDF would give the go ahead to Hinkley next month even though it did not have all the financing in place. EDF is also said by Les Echos to be considering disposing of a half stake in the Constellation Energy nuclear group in the US, plus a similar option to ditch its 50% holding in power transmission business RTE.

Hinkley

Further delays at the Daishan EPR project being built in China are hammering another nail in a coffin. The only debate now is whether the coffin will house the Hinkley C project or the whole of EDF. This news coincides with reports that EDF are planning asset sales to fund the Hinkley C project. The Daishan (or Taishan) plant’s construction was begun in 2009 and was supposed to be finished in 2013. Given the calamitous history of EPR constructions 2017 would count as a hopeful rather than likely date for a start-up. Earlie comment about how funding the Hinkley C project would lead to the financial downfall of EDF is now augmented by reports leaked of the sort of assets EDF will have to sell-off in order to fund Hinkley C. It becomes clear that EDF will have to sell-off profitable assets to fund Hinkley C, something that is almost universally regarded as at least a rather large gamble or, increasingly, a probable disaster that will sink EDF. Given that the EPR is proving to be such a turkey in three multibillion projects (Olikuoto, Flamanville and now Daishan) what sort of business decision can it be to fund a fourth project that could break the company? Only a state owned company that controls the (French) state could possibly do such a thing!

Hinkley

Over a third of major infrastructure projects branded ‘undeliverable’ or ‘in doubt’, report finds. The projects, which could include the HS2 rail line and Hinkley Point nuclear power station, run the risk of missing targets because of ‘unrealistic expectations’, the National Audit Office has said. A National Audit Office report spoke of a history of “unrealistic expectations and over-optimism” as it revealed that 37 of the 106 projects due to be completed within the next five years have been branded “unachievable” or “in-doubt” by a government body set up to monitor them. It is not known which of the projects, which include universal credit, the HS2 rail line and a new nuclear power plant at Hinkley Point – have been given red or amber red warnings by the Infrastructure and Projects Authority, putting their ability to meet targets for cost and timetables under threat.

Energy Policy

The government has repeatedly cited official forecasts of rising energy costs to justify cuts to subsidies for renewables, saying consumer bills need to be kept under control. But the calculations behind the forecasts – until now undisclosed – show it expects domestic energy bills to be nearly £100 lower in 2020 than previously thought, despite rising subsidies. The revelation comes in emails exchanged last May between senior civil servants at the Department of Energy and Climate Change (DECC) and the Treasury. The redacted emails – classified as “sensitive” – have been released by DECC to Carbon Brief following a long-running Freedom of Information request. The updated estimates – made in early 2015, but not previously released – found an average household energy bill would be £1,222 in 2020, some 7% (£97) lower than the £1,319 projection made the previous year. The reduction is largely down to falling fossil fuel prices. With fossil fuels responsible for about half of the UK’s power generation in 2015, DECC now expects wholesale electricity to cost less than 5p per unit in 2020, around 10% lower than it was projecting a year earlier. Yet ministers have repeatedly cited the official forecasts when explaining their changes to green energy policy. For example, Amber Rudd, energy and climate change secretary, told parliament in September: “I was shocked to find the scale of the [renewable energy subsidy] overspend and have therefore responded in order to keep consumer bills under control.”

Bradwell

Anti-nuclear campaigners are concerned a target date for the decommissioning of Bradwell Power Station has slipped. Magnox, which runs the site, has admitted an early target of closing the power station by the end of 2015 has not been reached, but maintains it will still be closed before the originally proposed 2027. However the Bradwell Against New Nuclear Group (BANNG) says it is indignant about the delay, and remains concerned that the changed timescales means a process of releasing low-level nuclear waste into the Blackwater estuary – a method approved by regulators – will now continue for longer. Varrie Blowers, BANNG secretary, said: “This is scandalous “The deadline for the entry of the former Bradwell nuclear power station into its Care and Maintenance state keeps shifting. At the Local Communities Liaison Committee meeting on June 3 it was announced the deadline had changed from the much-vaunted date of 2015. “It has now changed again from 2017 to 2019, and no real reasons have been given. “I would hazard a guess there are problems with the experimental accelerated dissolution process for the fuel element debris. “This extension means that radioactive discharges into the shallow Blackwater estuary will continue for years to come.”

Gov thinking seems to have finally caught up with reality - main question is not how best to make the taxpayer cough up for new nuclear. No justification for spending our money on outdated technology when renewables cheaper, quicker to build and cleaner.
https://t.co/PpeTfaBNpA